This article is part of a larger series on Sales Management.
A business proposal is a document sent to a prospective client that outlines a firm’s product or service offerings. It explains how you will provide a solution, the cost, the timeline, and qualifying information such as your background and prior work experience. Writing a business proposal demands a series of research tasks to help formulate various sections in your proposal draft.
Free Business Proposal Template
Creating a business proposal can feel tedious and repetitive, especially if you’re reinventing the wheel with every new sales opportunity. Without a template to guide you and allow a simple plug-and-play process, you find yourself repeatedly drafting a proposal from scratch each time. That’s why we’ve created a free business proposal template you can use as a resource for your proposal document.
Our free template offers you a solid reference point to follow along as we cover the steps in making an effective business proposal and preparing for writing the individual sections. With that said, here is how to create a business proposal in eight steps:
1. Determine Sales Proposal Requirements
The first step in learning how to make a business proposal is knowing what needs to be included. It should be noted that for a request for proposals (RFPs)—formal solicitation requests for products or services typically made by government agencies, public universities, and large corporations—the requirements are normally laid out line by line and must be followed precisely.
If you are writing a business proposal for a potential customer undergoing your unique sales process, include things a decision-maker would like to see. For instance, pricing, timelines, and the proposed solution regarding quantities and how you will deliver the product or service are critical purchasing factors enclosed in the document.
Pro tip: ClickUp is a free forever project management tool that can help your team:
2. Gather Necessary Information
Gathering essential information and materials for your proposal tends to be complex because each potential client may require different details. In turn, this could demand other personnel become involved and a wide range of sources to pull documents. For instance, some may only need to see the price and proposed solution, while others will want your background story, client reference lists, and work samples to show you’re qualified.
While you may have to dig around your file database for company information, employee biographies, marketing materials, and pricing sheets, it’s easier to store all resources you’ll need for a proposal in one place. Customer relationship management (CRM) systems are an excellent route because you can track your proposal progress and acquire what’s needed to draft it in one place.
Pipedrive is a popular CRM platform that lets you monitor opportunities and store documents in one system. The deal management module allows you to update and view where various opportunities are in the sales pipeline. Then, you can utilize the Smart Docs feature to store, share, and customize templates and materials you’ll need for your proposals and make them accessible to your whole team.
3. Design Your Proposed Solution
Your proposed solution involves the processes, materials, product quantities, and personnel you will use to fulfill the offerings or your customer’s problem statement. Additionally, it should be included in the scope of work section in the proposal. For businesses that only provide a product such as equipment for a factory or manufacturing plant, this step could be as easy as knowing the quantity and having a logistics plan for how you’ll deliver and install it.
For more service-based businesses, such as business consultants or content development services, there will likely be more steps and deliverables to complete the work. Regardless of your business, you can use the five W’s and an H methodology to construct a proposed solution that addresses your prospect’s primary pain points:
- Who: Who will be involved, do the work, manage, and be a point of contact for the prospect?
- What: What solutions or products will be delivered, and what resources, processes, or technology will be used?
- Where: Where will work be done or be delivered to?
- When: When will the work start and be completed, what are the key milestones throughout the project, and when is each deliverable expected to take place?
- How: How will work be done, managed, and checked for high quality and customer satisfaction?
- Why: Why did you choose this particular solution for this customer’s needs?
As an example, a business-to-business (B2B) content writing business might be trying to address a statement of needs issued by a client: “We would like to express thought leadership on the topic of the Zero Trust Cybersecurity Framework.” In this case, the business could send out this example proposed solution:
The objective of this business proposal is to demonstrate how ABC Writing Agency can promote the thought leadership of Cybersecurity Corp. for the Zero Trust Security Model.
We believe the best course of action is to research and copyright a branded e-book (roughly 4,000 words) regarding Zero Trust Security, the details of the solution, its benefits, and the modern-day security challenges it solves (what) with the final product completed August 2022. (when) The e-book will use your logo and branding scheme to convey your personal grasp on the subject and thought leadership using a series of direct quotes and statistical callouts. (why)
To ensure high-quality work and client satisfaction, we will begin with an initial call to construct a detailed outline discussing the sections, style guides, tone, and to retrieve direct quotes. Following an initial draft, multiple rounds of edits will take place between Cybersecurity Corp. and ABC Writing Agency to develop a final draft. (how)
The project will be led by our senior editor, Collin Buchanan, and content manager, Jake Cunningham, who comes from the world of cybersecurity. Our team will utilize and manage freelancers experienced in writing e-books on technical topics to research and copyright the asset. (who) All work will be completed by us virtually and delivered via Google Docs. (where)
4. Calculate Pricing
Once you know how you’ll provide your product or service, formulate the costs to include in the pricing section of your proposal. Being one of the toughest steps for how to make a business proposal because of all the factors that need to be considered, it’s critical to accurately communicate your costs to avoid losing a deal for overcharging—or worse—winning a deal with significantly underestimated costs.
As you price everything, you can either do a flat fee, hourly rate, per unit charge, or some combination of the three. Sometimes it’s best to work backward by establishing your desired probability first in the form of a percent like 20% profit or a flat dollar amount such as $10,000 above the work cost.
For example, you want to make a 20% profit on the work for an equipment installation job for a manufacturing business, and you’re pricing using a flat fee. You’ve itemized the costs as the following:
- 1 x $80,000 manufacturing equipment = $80,000
- 3 installation/delivery employees x 5 hours x $32 per hour = $480 wages
- $480 employee wages x 7% employer payroll tax = $33 payroll tax
- $480 employee wages x 20% benefits and workers’ compensation = $96 benefits and compensation
- $200 for the delivery truck and gas = $200 for delivery costs
Based on the itemized expenses, the total cost for this installation job will be around $80,809. To get the total you need to charge this customer to meet your desired profitability, multiply it by 20% to get $16,162. Add that to your total cost ($80,809 + $16,162), and $96,971 is the flat fee you will charge for the installation job.
Pro tip: Struggling to visualize your pricing process? Try using these seven free estimate templates. Designed for a variety of business types, these templates allow you to outline and itemize costs of providing work to easily share with your customers to help win more deals.
5. Draft Your Proposal
Now that you know your proposal requirements, have gathered the necessary information, determined the proposed solution, and calculated pricing, you are ready to draft the document. Following along with our free template, your draft will consist of the following sections:
The title page is more to show the professionalism of your business than provide information. There should be a specific title establishing the purpose, such as “ABC Writing Agency Proposal for Cybersecurity Corp. to Promote Thought Leadership on Zero Trust Security.”
Also, be sure to indicate who the proposal was prepared for in terms of the decision-making person and their company name. Add your logo to the front and the contact information for the primary point of contact for your business they can contact with further questions.
Table of Contents
Use a table of contents to break down each part of the business proposal so they can easily navigate through it. Because of the digital age we live in, we recommend linking your table of contents electronically to each associated section so that the person reading your proposal can go to any part of the document by clicking on the table of contents.
The executive summary takes everything in your proposal and compresses it into one paragraph. Essentially, if a reader reads this section, they should be able to grasp the general idea of your solution. Here’s an example using the content writing example above:
Here’s your time to talk about your inception story, mission statement, founding purpose, and company history. You can also provide biographies and professional pictures of your company founders, leaders, and key personnel that might be involved in the work you provide.
This is also the time to express your unique selling proposition. In other words, addressing the question “why choose us” over competitors. Lastly, if you’ve had any recognition or won any company awards, this is the section to highlight those successes.
Scope of Work
This section correlates with creating your proposed solution in step three as you present it in an actionable business plan. Describe the work that will be completed and the tangible deliverables associated with it.
For example, here’s how a content writing business might construct a scope of work:
We will provide content writing services to create predetermined marketing assets for Cybersecurity Corp. This includes researching online data for usable information, interviewing subject matter experts (SMEs) for additional insights and quotes, copywriting drafts, inserting callouts, and making edits per revision requests made by Cybersecurity Corp. Deliverables for the scope of work above include:
- 1 x outline developed by ABC Writing Agency and approved by Cybersecurity Corp.
- 1 x drafted e-book (max. 4,000 words) delivered by Google Doc
No matter how long your scope of work is, it’s crucial to avoid industry or technical jargon that might not be understood by just any reader. Any time you’re drafting the scope of work, review it and translate any statements that could be misunderstood or confusing to your reader.
Be sure to indicate how long you expect it to take to complete the entire scope of work. It’s also a good idea to provide estimates for each milestone or individual deliverable you set. Whenever possible, present the information visually to help your reader absorb it better. Below is a business proposal timeline example for a sales consulting business and its milestones.
Pricing or Price Estimate
For this section, take the price calculation you did in step four and present it to the potential customer. While you should itemize it to show where the price comes from, avoid adding your desired profitability as that should be private to your business. Make sure it’s clear as to how each item is priced, whether that be hourly, per unit, or a flat fee.
This section should also be used to explain payment expectations, e.g., when invoices must be paid by, how much money is required upfront vs after work is completed, refund policy, and if other billable expenses can be included automatically or require client approval.
If your business offering requires an estimate because you won’t know how many units of a product you’ll need or how many hours it will take, be upfront. Provide an explanation and an estimated range.
Conclusion, Terms & Appendix
The final sections should include additional information that could be useful to your prospective client. A conclusion should express your gratitude for the opportunity and explain the next steps to move forward. Terms (or terms and conditions) can be added in a proposal or in the service agreement to cover legal aspects such as contract dispute policies, confidentiality, rules on subcontracting, and other legalities of a working contract.
The appendix is optional but would utilize visuals or supplemental documents to enrich your proposal. For instance, you might include links to sample work, a client reference list, or a catalog of options for materials or software vendors from which the client can choose.
6. Edit Your Proposal Draft
Upon creating the first draft of your proposal, run through it with multiple sets of eyes from various departments to ensure it is comprehensive and accurate. Some things to consider as you review it for potential revisions:
- Has strong readability: The proposal uses appropriate style, tone, and structured sentences to create a clean flow of information understood by the specific reader.
- Avoids grammar and technical errors: The proposal avoids punctuation, spelling, or other errors related to proper writing mechanics.
- Addresses requirements: The proposal contains all the information and sections required to meet the reader’s or customer’s needs and objectives.
Use editing tools such as Grammarly to evaluate your writing for enhanced quality. Grammarly lets users upload text into a system to check for grammar and spelling mistakes as well as engagement and readability of content. There’s also a plagiarism check feature to evaluate the text to billions of pages online. You can even adjust style preferences when subscribing to Grammarly Business to ensure it meets all your goals.
Pro tip: Use graphic design tools like Canva to give your business proposal the professional touch it needs. Canva is a user-friendly platform with thousands of free templates for presentations, marketing materials, social media posts, and proposals. Users of all design skill levels can easily turn regular copies into visual masterpieces.
7. Send Your Proposal
Now that your proposal is drafted, edited, and has the aesthetics it needs, you are ready to send it out for review. More formal submissions for RFPs may require that you submit them in person, electronically, or both, so review those provisions carefully before sending them in.
Some sales plans incorporate unsolicited business proposals to new leads to present problems they didn’t know existed with viable solutions they can offer. In these cases, they use the proposal to get their foot in the door and create sales opportunities.
When taking this course of action, it’s important to add context to the unsolicited proposal. For instance, in a sales email, briefly introduce yourself, your business, and what services it provides. Furthermore, indicate why you wanted to send a proposal to them specifically and let them know they can reach out if they wish to discuss it further.
8. Follow Up With Your Recipient
Even after you send a proposal, the process is not over. Make time to follow up to confirm the contact received the proposal and see if they have any questions. Because of the proposals’ details, there are usually other clarification steps in the procurement process, such as interviews, client meetings, or presentations before work begins.
We recommend using a customer relationship manager (CRM) with task management capabilities to ensure sales reps don’t forget to reach out to a prospect after a proposal is initially sent. HubSpot, for instance, lets you design and assign general tasks to team members. There’s also the option to create tasks within lead or deal records to manage activity for a specific opportunity.
Many business owners and sales managers would like to standardize their proposal-writing system. However, it can be tricky to address the unique needs of every solicited and unsolicited opportunity to get the correct information in order and present their proposed solutions. Luckily, our how-to business proposal examples and free template will help you streamline your bidding process to win more deals.